IT Infrastructure Outsourcing Helps Shell Lower Costs, Drive Increased Efficiency
IT Infrastructure Outsourcing Helps Shell Lower Costs,
Drive Increased Efficiency
With more than 104,000 employees in more than 110 countries, Shell plays a key role in
helping to meet the world’s growing demand for energy in economically, environmentally
and socially responsible ways.
Despite turbulence in the gas and oil industry, Shell continues to grow its business globally.
In 2007, earnings reached US$32 billion and capital expenditures US$24 billion.
To excel as a major oil and gas producer, Shell needs a reliable and versatile information
technology (IT) infrastructure that leverages new technology and enables business
innovation. From helping to discover new oil to supporting teamwork across its global
workforce, IT infrastructure is vital for the success of Shell’s business.
In October 2005, Shell began investigating options for IT infrastructure delivery in the
future. In 2006, the company expressed the intention to outsource a substantial part of the
IT infrastructure services, while retaining strategic control and also certain specialist
services that bring specific competitive advantage.
As a consequence, Shell’s “Infrastructure Sourcing Program” was launched as one of the
largest and most complex business transformation programs undertaken by the company.
Working together with sourcing advisory experts from ISG, Shell’s program implemented a
new infrastructure delivery model and sourcing strategy to bring substantial benefits to its
business. The program has impressed stakeholders within and outside Shell; every deadline
set was hit; every target was met or exceeded. Powerful lessons can be learned from this
program setup and management.
A Changing World
The Shell logo has existed for more than 100 years, testament to the company’s vast
experience and leading position in the oil and gas industry.
However, times have never been more turbulent. In today’s markets, companies such as
Shell face a highly competitive environment, with volatile crude oil prices, and increasing
technical challenges and costs to find and produce hydrocarbon reserves.
IT Infrastructure Outsourcing
IT infrastructure outsourcing strategy to
support global workforce
Increased value from service providers
Improved elasticity in service capacity
Optimized IT spend to foster innovation
and applications development
Blueprint for multisourced IT services
Customized RFP process
Service provider evaluation and selection
Infrastructure sourcing program to spur
Improved stakeholder engagement
Professional change and communications
Increased transparency and accountability
in service provider relationships
To continue to thrive, Shell’s strategy is “More Upstream, Profitable Downstream.” In other
words, the company aims to grow its hydrocarbon reserves and production while ensuring
that manufacturing, marketing and distribution of products remain cost-effective and
Technology is key to the success of Shell’s business strategy, and IT (infrastructure) is the
pervasive technology that impacts the performance of all its business activities.
Between 2002 and 2005, Shell accomplished a successful initiative to globalize its IT
infrastructure. The organization, technology and processes were standardized and
streamlined, while many parts moved to Malaysia and India. Reliability, global working and
unit costs improved immensely, providing Shell with robust and efficient infrastructure